iSixSigma

Operational Cost

Definition of Operational Cost:

Sometimes referred to as revenue or running costs, these are the costs resulting from day-to-day running of an operation (e.g. staff costs, hardware maintenance and electricity).

The value of the item purchased will diminish as it is used up (e.g., consultancy)

Sometimes operational costs are a variable cost (paper, consultancy assistance) and sometimes fixed (salaries)

For practical purposes in IT Accounting, operational costs can be considered as those charged to a single financial year, with no depreciation element.

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